1	Music Cecilia Noël, a rising leading lady of salsa; Irene B and Choco Orta bring their own style; Chayanne talks about life. read more...
2	Film & TV The new adventures of Yasmin and Crash; Oscar Nuñez outside The Office. read more...
3	Books Two top broadcasters share their insights. read more...
4	Ask Julie It’s time to reorganize your finances. read more...
5	Calendar Noteworthy Hispanic events around the country in May. read more...
6	Picture This The first Latina astronaut reaches for the stars. read more...

It’s Time to Press the Reset Button

If you had a chest of three drawers in your bedroom, where would you keep your underwear? Chances are, if you are like me, you would tuck away your Victoria’s Secret—or is it Fruit of The Loom?—underwear in the top drawer because you can easily get to it.
The bottom drawer would most likely hold your itchy sweaters or a collection of shawls that you rarely wear, and the middle drawer would holds everything in between —perhaps T-shirts and shorts.
Your investments need to be organized according to this three-drawer system, too. Money that you’ll need access daily or quickly should be in the underwear drawer. This is the short-term and liquid file. Funds you don’t need to touch until retirement belong in the bottom drawer. This is the long-term stuff that you cannot access before age 59.5 without a penalty. You don’t pay taxes on it until the money is withdrawn. The middle drawer holds investments poised for growth.The Top Drawer
Let’s open the top drawer. What’s in it? Money in your savings and checking accounts, certificates of deposit, money market accounts, and treasury bills. These are funds you use to pay bills, buy food, and maintain your daily life. You don’t buy stocks with funds in this drawer. Basically, it holds any amount that you are not willing to risk or tie up for two years or more. If you think you will need it before two years, it belongs here.
Could you have too much money in the top drawer? Yes. Many women in particular do not want to take unnecessary risks with their money and simply open several CDs at fixed rates with all their money in a trusty FDIC-insured institution—making a whopping 2 percent on their money. Although a bank offers a safe haven for short-term money needs, it is definitely not the place to keep monies that you do not intend to use for a long time and could be working hard for you somewhere else. You may find yourself losing your money “safely” in a bank that pays you less than the damage caused by inflation and taxes.The Bottom Drawer
Here’s the place for funds you’ll keep in your retirement accounts: IRA, 401(k) and Roth IRA. They may be invested in stocks, bonds, mutual funds, annuities or Exchange Traded Funds. The money you put in this drawer is for your long-term accounts, so think twice before tying up any funds that you feel you may need before your 60th birthday.The Middle Drawer
I call this my greed drawer. Stocks and mutual funds, among others, call this home. The difference between this drawer and the bottom one is accessibility; you can get to these investments without taking into account any government rulings that regulate retirement accounts. However, don’t put anything in this drawer that you will need in the next two to five years.How to Stuff Your Drawers
Start from the top drawer. Any wages, commissions and income you receive should go there every month. The money left over each month before you deposit your next paycheck should be moved to the middle drawer. I can almost hear your snickering, “What money left over?” If that is your case, it is time to take a hard look at your spending. Write down on a sheet of paper what comes into your household every month and what goes out. If you consistently spend more money than you make, get help immediately by going to www.nfcc.org and talking to a credit advisor.
As you put money in your middle drawer, you may want to move some to the bottom drawer, as well. The basic principle is to begin at the top and carry a flow to drawers two and three during your working years. When you retire, reverse the plan, using drawers two and three to feed your spending drawer number one. If you want to learn how to follow this simple plan and choose the best investments for each drawer, I take you by the hand and guide you in my books Get Your Share, Fund Your Future and The Money in You.

Listen to Julie Stav’s
radio program Monday through Friday on your
local Univision radio station. For more information visit www.JulieStav.com.